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Setback for B.C. LNG pipeline?

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World Pipelines,

A Federal Court of Appeal judge has ruled the National Energy Board must reconsider whether a proposed TransCanada Corp. natural gas pipeline in B.C. falls under provincial or federal jurisdiction.

"The board did not ask itself whether an arguable case for federal jurisdiction had been made out," wrote judge Donald J. Rennie in his judgement last Wednesday in response to a proceeding launched by Michael Sawyer, who received funding support from the SkeenaWild Conservation Trust.

Sawyer argued that the Prince Rupert Gas Transmission Project, a 900 km proposed pipeline from Hudson's Hope, B.C., to a facility on the province's Lelu Island, required federal and not provincial approvals.

The province has already greenlighted the pipeline project, but it is waiting to receive a final commitment from Pacific NorthWest LNG, which will build and operate the Lelu Island facility, before starting construction.

Pacific NorthWest, whose majority owner is Malaysia-based Petronas, says on its website that it is conducting an internal review of the project and will then table it to the project's shareholders for a final investment decision.

In September 2016, the federal government approved Pacific NorthWest's CAN$11 billion facility, part of the total CAN$36 billion pipeline project.

Prior to the legal proceedings, Sawyer had filed an application to the NEB for the board to hold a hearing to determine what jurisdiction the pipeline project falls under. He argued that while it is located in the province, it will move gas destined to be exported.

The NEB rejected his application, but now must reconsider it due to Rennie's ruling.

TransCanada has 60 days to apply for leave to appeal. v  

The appeals court ruling comes as a major blow to TransCanada, which even applied to proceed with construction of the North Montney Mainline (NMML) Project, contingent on a positive final investment decision on the proposed Pacific Northwest LNG (PNW) Project, which is being developed by Malaysia’s Petronas.

At that time, TransCanada said that, “Subject to regulatory approvals, TransCanada plans to begin construction in the first half of 2018, with facilities being phased into service over a two-year period, beginning in April 2019.”

“The board had put a lot of weight on the fact that the pipeline begins and ends within British Columbia but didn’t take into account the jurisdictional consequences of the fact that the purpose of the Prince Rupert pipeline is to bring gas from the northeast of B.C. to Prince Rupert for export — and it’s that ‘for export’ that is a factor pointing to federal jurisdiction,” Sawyer’s lawyer, William Andrews, told press.

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